Huntsville, Ont., with a population of just under 20,000, is a half-hour drive from Algonquin Provincial Park, and the ice trails at Arrowhead Provincial Park are within the town boundaries. You can find gluten-free smoked duck salad at The Mill on Main, a bathtub derby during a July festival and six—count ‘em, six—brokerages.

“When we just opened up [in 2013],” says Tim Withey, president of Huntsville’s Withey Insurance Brokers, “…some of my friends and colleagues in the neighbourhood were saying, ‘Well, how can you be another broker just opening up? There’s only so many people who buy insurance in this town.’”

But there’s no need to limit business to one town or even one time zone. “I’ve actually, over the years, built a pretty good side of business to do a national program,” says Withey. “So we’re licensed across the country.”

Withey also points to the importance of association work. “We’re endorsed by WETT [Wood Energy Technology Transfer] Canada, which are the wood stoves. So if you go on WETT Canada’s website, and they say, if you’re looking for insurance… to call us.” So Withey has clients from Halifax to Victoria.

Even within the Muskoka region, there’s a lot of business beyond Huntsville’s year-round residents. The area’s population jumps to 85,000 in the summer, and those folks’ cottages and boats and snowmobiles need to be insured as well.

Many cottages often rely on wood stoves and fireplaces for heat. So in addition to vandalism, Withey sees the most claims come from fire damage. To minimize that risk, insurers charge extra if a cottage lacks year-round road access. “Because if there were to be a fire or something in the winter,” says Emily Withey, Tim’s daughter and an account executive at the brokerage, “the responding fire hall can’t get to your cottage because the road isn’t ploughed. That would lead to more total losses rather than being [able] to put the fire out and save some of the costs.”

That’s what happened about 10 years ago, when Tim Withey was on a fishing trip in Algonquin Park. “There’s really no fire service at all,” he says. So when a friend’s cottage caught on fire in the middle of the night, “nobody showed up. We basically had to bucket brigade ourselves and we very quickly turned from trying to save the building to trying to stop the forest around it from going up. The building was lost.” The group of friends tried contacting the Ministry of Natural Resources, since Algonquin is a provincial park, but staff only paddled by the next morning, after the blaze had been put out.

Long distances from fire halls aren’t only a Muskoka problem. Gord McCool works with many remote cottages and resorts in northwestern Ontario, and had two total losses over the Victoria Day weekend. “There’s some drive-tos where it’s an hour and a half down a road from the closest fire hall,” says McCool, CEO of Standard Insurance Brokers in Kenora, Ont. So a fire that would result in “a partial loss in town is going to be a complete loss. It’s not going out.”

But overall, McCool finds cottagers without year-round road access make fewer claims. “Ironically,” he says, “it seems to be better when there is no access to their property, and it’s shut down for the winter… You’ll see them drain the pipes, shut off the power and, if there’s no access to the place, the chances of it getting vandalized or broken into and [having] things stolen are less.” But putting the cottage to bed won’t prevent lightning fires or falling trees. When ice roads allow year-round access, and cottagers keep the building heated through the winter but can’t regularly drop by, “that adds a level of risk.”

Mark Pedicelli, president of brokerage Dube Cooke Pedicelli in Mont- Tremblant, Que., takes special steps to prevent costly fire claims. The company won’t cover secondary homes worth more than $300,000— Mont-Tremblant “cottages” are less backcountry and more country club—unless the owner installs a fire alarm and during the winter, finds a local resident to check on the property each week. The alarms and visits help the company “avoid the situation where… there’s a smoldering fire going on when there’s nobody on the premises,” says Pedicelli. “We want to be able to act ASAP.” He adds that the alarm system in a recent fire reduced what could have been a $2-million claim to a $200,000 claim. “So I think our strategy worked.”

“…Those big city brokers”

Dube Cooke Pedicelli offers discountst to clients who install burglar alarms, but they don’t make it a requirement because short-term renters might accidentally set it off over and over again. Pedicelli says that up until 2010, policies were put in place to prevent clients from “creating their own websites, doing it themselves, leaving keys under the mat…” But the company has since mellowed, and allows its clients to rent their space as they see fit if they guarantee a local, usually the same person who responds to the fire alarm, will check on the home when guests arrive and leave. Premiums increase by 20 percent, and homeowners aren’t limited to a set number of rental weeks. “If the owner is doing things at a distance and doesn’t have someone going in because they decide to do it themselves the next time they come up, that’s when we say no.”

That sort of flexibility for short-term rentals is quite rare. “There are surcharges as soon as you start doing it,” says Lesley Harrison, branch manager at McDougall Insurance in Picton, a town of nearly 4,000 in Ontario’s Prince Edward County. “Usually the range is up to four weeks, up to six weeks, up to eight weeks, up to 12 weeks and then unlimited,” which is on a commercial policy where premiums are at least double. Most often, Harrison sees the six- and twelve-week rental additions, which ups premiums by 15 to 25 percent. But that increase doesn’t deter too many County folk. Harrison has seen properties fetch $4,000 for a week, a price that convinces clients to “live in their boats or stay with friends or family and rent out their entire houses now.” Handling that insurance is tricky, but Harrison found a few insurers willing to underwrite the risk. “They just change the form of coverage they’re eligible for… It might be dropped down to a broad form or named perils policy because of the rental issue.”

Adaptation is always good, but when a small town has several brokerages and insurers, competition is fierce. In Prince Edward County, home to two brokerages, a State Farm, a Co-operators and the usual selection of banks, McDougall Insurance tries to fill the niche market of large properties. Even if the owners don’t plan on farming, standard carriers don’t write such properties with more than 20 acres of land on a homeowners’ policy, so Harrison places those clients with companies that write farm insurance. “They put them on hobby farm packages so they’re not really farms but they have some extra liability because they’ve got so much land,” says Harrison. She adds in that market, McDougall can do better than banks, which don’t cover farms at all.

And then there are the retirees. Brokers across cottage country regions have noticed an increase in city folk who plan on renovating and then retiring to their cottages. Tim Withey brings up a potential client who had a nearly $2-million home built, and who owns a $75,000 boat and a $5,000 trailer. And this luxury appears in Mont-Tremblant and Prince Edward County too. “So if we do a good job with their cottage or their rental cottage or whatever it is,” says Harrison, “then eventually we tend to get the rest of their business… as they move here.”

But even before baby boomers move out of the city, some cottage country brokers are working on more than the boathouse and snowmobile. “It’s always best to package,” says Emily Withey. “So we often find that people come looking for cottage insurance here, but end up putting all their stuff with us, because it makes more sense that way in terms of premiums… Sometimes we end up with the full package, even if they’re from Ottawa or Toronto or wherever they’re from.”

“We try to steal from those big city brokers,” quips Tim Withey.

If you can’t steal from ‘em, join ‘em. Many Manitobans, for instance, have cottages in the Lake of the Woods area, which is about a two-hour drive from Winnipeg, and Standard Insurance Brokers don’t write habitational policies in Manitoba. So when an out-of-province client is looking to insure their city home, Kenora-based McCool refers them to his Winnipeg partner, who in turn sends clients back to McCool for cottage insurance. And that includes more than the building.

Watercraft coverage can be extended off seasonal recreational property insurance, but McCool suggests purchasing separate marine coverage. That way, a claim on the boat—which could be over an accident from a motorboat hitting a shoal or, as Tim Withey points out, someone simply walking off with a $5,000 canoe—won’t affect a client’s claims-free status on their home and cottage insurance.

“You could have six American dentists…”

Then there are the opportunities for cottage country brokers in commercial lines, even if resorts and tour companies aren’t technically part of the cottage market. “Most insurance companies aren’t comfortable with the backcountry,” says Dean Bailey, co-owner of Rocky Mountain Agencies in Banff, Alta. “In the winter, they’re concerned with the avalanche exposure and in the summertime, it’s just the ability for First Aid to get in and things like that.” So the four-day tours focus on hiking, swimming and whitewater rafting, but “the biggest exposure they seem to have is when people are getting on and off the tour bus.”

Bus-related injuries fall “under the bodily [injury] portion of an automobile policy,” says Bailey. He adds that other than bus coverage, which can be reduced for seasonal operations, general liability policies are essential for tour companies. He’s seen a few small claims from ankles twisted on hiking tours, but waivers often prevent liability lawsuits from going forward.

For the most part, activities like hiking and fishing are easy to insure, says McCool in Kenora, while it takes him more time to place business for resorts offering wilderness survival weekends and hunting trips. Still, after slip and falls, he has seen the most claims come from boating accidents.

“You do see all the way up to, unfortunately, liability suits for death,” says McCool. “…These accidents do happen, whether someone’s on a paddleboard and not wearing a lifejacket and falls and hits their head to, you know, a guide runs over a rock and someone falls out of the boat.”

Resorts also need to consider liability suits when bringing guests up north. Many are remote, some fly-in only, and operate small planes to help with guests’ transportation. They require hull coverage for the physical airplane, and liability policies for any accidents. “A lot of the times, with clients visiting these places, they have a high net worth,” says McCool, “and the exposure from a liability standpoint is very high… You could have six American dentists, for example, and if the plane does go down, it’s going to be a large payout.”

So dockside dozing, whether at the family cabin or a remote resort, involves some of the risks of urban life, plus the possibility of too-far fire halls, bear attacks, stolen canoes and guests who don’t know how to swim. And peaceful summers at the lake also require peace of mind.

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Copyright 2015 Rogers Publishing Ltd. This article first appeared in the June / July 2015 edition of Canadian Insurance Top Broker magazine